The Nature of Management Topic 3 (Chapter 6)

Planning
Process organizing organization goals
controlling
leading

The Importance of Management

Management

• A process designed to achieve an organisation’s objectives by using its resources

effectively and efficiently in a changing environment

 Effectively means having the intended result

 Efficiently means accomplishing objectives with a minimum of resources

Managers

• Individuals in organisations who make decisions about use of resources

• Use planning, organising, staffing, directing and controlling to reach organisational

objectives

• Every organisation must acquire/manage resources (people, services, raw materials,

equipment, finances, and information) to effectively pursue its objectives. Managing
resources involve: -

Staffing

• Hiring people to carry out the work of the organisation

• Downsizing: the elimination of significant numbers of employees from an organisation.

Acquiring Suppliers

• Ensure products are made available to customers and maximizes efficiencies and
provides creative solutions

Financial Resources

• Needed to pay for essential activities

The major functions of management

managers

Organizing Directing
Planning Controlling
resources and empolyees'
ativities to achieve activities toward the organization's
activities to achieve
the organization's achievement of activities to keep it
the organization's
objectives objectives on course
objectives

Planning
1. Planning is the process of determining the organisation’s objectives and deciding how to
accomplish them.

2. Planning involves setting the organisation’s mission statement, goals and objectives.

I. A mission, or mission statement, is a declaration/statement of an organisation’s

fundamental purpose and basic philosophy. It explains the organisation’s reason for
existence.
II. A goal is the result that a firm wish to achieve.
III. Objectives, the ends or results desired by an organisation, derive from the organisation’s
mission.

Forms of planning/plan

Top management
New product
Strategic Planning

Middle management Research new product and the annual costs to

Tactical Planning produce

First-line management Specific dates / days - ingredients must be

sent to branches, work schedule
Operational Planning

Non-supervisory Employees
3. There are four general types of plans for meeting objectives:-

(i) Strategic plan ~A firm’s highest managers develop its strategic plans, which establish the long-range
objectives and overall strategy or course of action by which the firm fulfills its mission. Strategic plans
generally cover periods of one year or longer.

(ii) Tactical plans ~Tactical plans are short range and designed to implement the activities and objectives
specified in the strategic plan.

These plans, which usually cover a period of one year or less, help keep the organisation on the course
established in the strategic plan.

(iii) Operational plans are very short term and specify what actions specific individuals, work groups, or
departments need to accomplish in order to achieve the tactical plan and, ultimately, the strategic plan.

They apply to details in executing activities in one month, week, or even day.

(iv) Crisis (disaster/trouble) management or contingency planning (back-up plan), which deals with
potential disasters such as product tampering, oil spills, fire, earthquake, computer viruses, or even a
reputation crisis due to unethical or illegal conduct by one or more employees.

Organising
1. Organising is the structuring of resources and activities to accomplish objectives in an efficient
and effective manner.

2. Organising:

• Helps create synergy (The whole is greater than the sum of its parts)

• Establishes lines of authority

• Improves communication

• Helps avoid duplication (copying) of resources

• Can improve competitiveness by speeding up decision making

Leading
• Management process of guiding and motivating employees to meet an organization’s
objectives

• Is the function concerned with creating a vision for the organization and communicating,
guiding, training, and motivating others

• Leading today often involves empowering workers and giving them the freedom
to become self-directed and self-motivated
Directing/Leading
1. Directing refers to motivating and leading employees to achieve organisational objectives.

2. Good directing involves:

• Telling employees what to do and when to do it by using deadlines

• Determining and administering rewards and recognition

• Motivate employees by providing incentives

• Asking workers to contribute ideas

Controlling

1. Controlling is the process of evaluating and correcting activities to keep the organisation on
course.

2. Controlling is consists of five activities:

a. Measuring performance(80% PR)

b. Comparing present performance with standards or objectives (80%vs–60%)

c. Identifying deviations from standards(20%)

d. Investigating causes of deviations (syllabus?)

e. Taking corrective action when necessary (reduce syllabus)

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Levels of Management Planning

Types/Three levels of Management
Top management

• Includes the president and other top executives of a business, such as chief executive
officer (CEO), chief financial officer (CFO), and chief operations officer (COO), who have
overall responsibility for the organisation

• What they do? /Function:

o Includes the president and other top executives of a business, such as chief
executive officer (CEO), chief financial officer (CFO), and chief operations officer
(COO), who have overall responsibility for the organisation

o Spend most of their time planning

o Compensation committees work with directors and CEOs to keep pay in line
with performance

o Encourage workforce diversity is good for workers and bottom line

Middle management

• Responsible for tactical and operational planning that implements the general
guidelines established by top management

• Responsibility:

 is more narrowly focused

 Involved in the specific operations of the organisation

 Example: Plant (factory) managers, division managers, department managers

First-Line management

• Responsible for implementing the plans established by middle management

• Responsibility

 Direct workers’ daily performance

 Spend most of their time directing and controlling

 Example: Foreman, supervisor, office manager

Five Rules of Successful Diversity Recruiting
1. Involve employees: Educate all employees on the tangible benefits of diversity recruiting to
garner support and enthusiasm for those initiatives.

2. Communicate diversity: Prospective employees are not likely to become excited about joining
your company just because you say that your company is diversity-friendly; they need to see it.

3. Support diversity initiatives and activities: By supporting community-based diversity

organisations, your company will generate the priceless word-of-mouth publicity that will lead
qualified diversity candidates to your company.

4. Delegate resources: If you are serious about diversity recruiting, you will need to spend some
money getting your message out to the right places.

5. Promote your diversity initiatives: Employers need to sell their company to prospective
diversity employees and present them with a convincing case as to why their company is a good
fit for the diversity candidate.

Areas of Management
Financial Manager ~ Focus on obtaining the money needed for the successful operation of the
organisation and using that money in accordance with organisational goals.

Production and Operations Manager ~ Develop and administer the activities involved in transforming
resources into goods, services, and ideas ready for the marketplace

Human Resources Manager ~ Handle the staffing function and deal with employees in a formalized
manner

Marketing Manager ~ Responsible for planning, pricing, and promoting products and making them
available to customers through distribution.

Information Technology (IT) Manager ~ Responsible for implementing, maintaining, and controlling
technology applications in business, such as computer networks.

Administrative Manager ~ Manage an entire business or a major segment of a business;

do not specialize in a particular function.

Skills Needed by Managers

 Technical expertise
• the specialized knowledge and training required to perform jobs
related to their area of management.
 Conceptual skills
 • the ability to think in abstract terms (theoretical), and to see how parts fit together to
form the whole, are needed by all managers, but particularly top-level managers.
 Analytical skills
• refer to the ability to identify relevant issues (problem) and recognize
their importance, understand the relationships between them, and
perceive the underlying causes of a situation.
 Human relations / people skills
• are the ability to deal with people, both inside and outside the organisation.
 Leadership
• Ability to influence employees to work toward organisational goals

Managers often can be classified into three types based on their leadership style: -
i. Autocratic leaders make all the decisions and then tell employees what must be done and how
to do it.

ii. Democratic leaders involve their employees in decisions. The manager presents a situation and
encourages his or her subordinates (lower level workers) to express opinions and contribute
ideas.

Free-rein leaders let their employees work without much interference (involvement). The manager sets
performance standards and allows employees to find their own ways to meet them.

Authentic (genuine)leadership is a bit different from the other three leadership styles because it is not
exclusive (not completely/not restricted to only). Both democratic and free-rein leaders could qualify as
authentic leaders depending upon how they conduct themselves among stakeholders.

Authentic leaders are passionate about the goals and mission of the company, display corporate values
in the workplace, and form long-term relationships with stakeholders.

Requirements for Successful Leadership

1. Communicate objectives and expectations.

2. Gain the respect and trust of stakeholders.

3. Develop shared values.

4. Acquire and share knowledge.

5. Empower employees to make decisions.

6. Be a role model for appropriate behavior.

7. Provide rewards and take corrective action to achieve goals.

Leadership
Employee Empowerment ~ Occurs when employees are provided with the ability to take on
responsibilities and make decisions about their jobs

Systems to encourage employee empowerment:-

1. Participative decision making - Participative decision making, a type of decision making that
involves both manager and employee input, supports employee empowerment within the
organisation.
2. Leadership in teams - Although decision making in teams is collective, the most effective teams
are those in which all employees are encouraged to contribute their ideas and
recommendations.

Step…

Decision Making
Recognizing and Defining the Decision Situation (study)

• Situations may be positive (good situation) or negative (bad situation)

• Situations calling for small-scale decisions occur without warning

• Large-scale decisions generally occur after some warning signs

• Once a situation is recognized, management must define it

Developing Options (KDU, INTI, TARUC)

• A list of possible courses of actions should include both standard and creative plans

• Brainstorming: a technique in which group members spontaneously suggest ideas to

solve a problem, is an effective way to encourage creativity and explore a variety of
options.

Analyzing Options (cost, duration, reputation)

• Management must look at the practicality (usefulness) and appropriateness of each option

• When assessing appropriateness, the decision maker should consider whether the proposed
option adequately addresses the situation.

Selecting the Best Option (TARUC)

• Often a subjective procedure

 • The best option always relates to analyzing risks and trade-offs

Implementing the Decision (register)

• Can be fairly simple or very complex

• Prepare for unexpected consequences

Monitoring the Consequences (mid-term? classes?)

• Did the decision accomplish the desired result?

Management in Practice
Management is not an exact process (precise activity)

Managers spend time on:

• Working with others

• Establishing and updating an agenda of goals and implementation plans
• Networking (build connection)
• Confronting complex and difficult challenges of the business world